Lynas Corporation Limited (ASX: LYC) has managed to rebound from its Friday lows but things are still not looking good for the rare earths miner or its shareholders.
Although China's stranglehold over the rare earths market has loosened over the course of the year, prices are still depressed and Lynas' cash position continues to decline. While Lynas has attempted to reassure investors that it is still looking confidently towards the future, investors are clearly not so sure.
The stock hit an all-time low last week at just 4 cents, down from a high of 34 cents earlier this year. Now trading at 4.6 cents (up 2.2% for the day), the stock has lost more than 23% since the beginning of December, while it is down 84% over the last 12 months.
If prices remain low and Lynas' cash continues to drop, I wouldn't be surprised to see another capital raising which would dilute equity further and most likely force the share price even lower. While some speculative investors will no doubt be interested in a possible rebound, long-term investors should steer well clear of this potentially disastrous stock.
